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Transit costs and cost efficiency: Bootstrapping non-parametric frontiers

  • de Borger, Bruno
  • Kerstens, Kristiaan
  • Staat, Matthias

This paper explores a selection of recently proposed bootstrapping techniques to estimate non-parametric convex (DEA) cost frontiers and efficiency scores for transit firms. Using a sample of Norwegian bus operators, the key results can be summarized as follows: (i) the bias implied by uncorrected cost efficiency measures is numerically important (close to 25%), (ii) the bootstrapped-based test rejects the constant returns to scale hypothesis, and (iii) explaining patterns of efficiency scores using a two-stage bootstrapping approach detects only one significant covariate, in contrast to earlier results highlighting, e.g., the positive impact of high-powered contract types. Finally, comparing the average inefficiency obtained for the Norwegian data set with an analogous estimate for a smaller French sample illustrates how the estimated differences in average efficiency almost disappear once sample size differences are accounted for.

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Article provided by Elsevier in its journal Research in Transportation Economics.

Volume (Year): 23 (2008)
Issue (Month): 1 (January)
Pages: 53-64

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Handle: RePEc:eee:retrec:v:23:y:2008:i:1:p:53-64
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